Sterling rises as investors see pound as 'safe haven'
Sterling rose against the US dollar yesterday hitting a high of $1.6520/£1 as markets became increasingly concerned with the financial turbulence.
Sterling rose against the US dollar yesterday hitting a high of $1.6520/£1 as markets became increasingly concerned with the financial turbulence.
Currency rates & Comments - August 23
EURO/GBP - 1.1469
US$/GBP - 1.6500
CHF/GBP - 1.3009
CAN$/GBP - 1.6292
AUS$/GBP - 1.5757
ZAR/GBP - 11.831
JPY/GBP - 126.66
HKD/GBP - 12.870
NZD/GBP - 1.9874
SEK/GBP - 10.479
US$/EURO - 1.4391
Sterling also made gains against the euro. Investors are currently viewing sterling as a 'semi safe haven' as it is perceived to be in a relatively good fiscal position in comparison to the US and Euro zone, but there are still concerns over the UK's recovery.
In the euro zone, the euro slipped marginally against the US dollar and trading was fairly flat with many investors sitting on the sidelines ahead of an important speech by Fed Chairman Ben Bernanke later this week. European shares dropped as investors became concerned that European officials are taking too long to resolve the sovereign debt crisis, with German chancellor Angela Merkel sinking plans for a single "Eurobond" over the weekend.
In the USA, the US dollar weakened against commodity linked currencies yesterday on rumours that the US Federal Reserve will announce another round of emergency stimulus for the economy. On a more positive note, US stocks (particularly energy stocks) gained in early trading yesterday, making a comeback from a worrying four week decline. On Friday, there is a key meeting at Jackson Hole in the USA amongst central bankers and many market players are concerned that this will mean further stimulus being announced by the Federal Reserve.
Elsewhere, the Swiss National Bank tried to deter investors from purchasing the currency as the astronomic rise in demand for the Swiss franc impacts exporters. It has been rumoured that Japan is set to do the same to further weaken the yen. Oil prices dropped as Libyan rebels reached Tripoli overnight and despite continued fighting many feel that the end of the conflict is near.
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